Berkshire Hathaway, led by Warren Buffett (Trades, Portfolio), plans a second issuance of yen-denominated bonds this year, prompting speculation about increased investments in Japan. Japanese trading firm stocks have responded positively to this news.
The company has enlisted Bank of America Securities and Mizuho Securities to issue these unsecured priority yen bonds. Berkshire Hathaway has been a regular issuer of yen notes since 2019, with the last issuance in April.
Investors closely monitor Berkshire Hathaway's financing strategies as Buffett's prior investments in Japanese trading firms propelled the Nikkei 225 Index to historic highs. Buffett mentioned in his February annual shareholder letter that most of Berkshire Hathaway's investments in Japanese companies were financed through yen-bond issuances.
Japanese trading firms saw continued stock gains in Tokyo, with their index rising by 2.8%. In comparison, the Nikkei 225 Index increased by 1.87%. Itochu Corp. saw a 3.8% rise, and Mitsui & Co. (MITSY, Financial) surged by 4.2%.
Buffett's favored Japanese trading firms include Itochu Corp. (ITOCHU), Marubeni Corp., Mitsubishi Corp., Mitsui & Co. (MITSY, Financial), and Sumitomo Corp. In his February letter, Buffett revealed that Berkshire Hathaway's stake in these firms had increased to around 9%, indicating a long-term investment horizon of 10 to 20 years.
